If Assets Are Imperfect Substitutes, Then a Decrease in the Amount

question 57

Multiple Choice

If assets are imperfect substitutes, then a decrease in the amount of domestic currency bonds held by the public will ________ the risk premium and ________ the amount of domestic currency bonds held by the central bank.

• A) decrease; leave unchanged
• B) increase; decrease
• C) increase; increase
• D) decrease; decrease
• E) leave unchanged; decrease

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Definitions:

Distinct, Specific Behaviors

Unique or particular actions or reactions of individuals or groups in response to external stimuli or their internal states.

Cephalocaudal Development

The developmental principle that growth follows a pattern that begins with the head and upper body parts and then proceeds down to the rest of the body.

Proximodistal Development

A developmental principle where growth starts at the center of the body and progresses outwards to the extremities.

Maturity

The state of being fully developed physically or emotionally, or exhibiting behaviors typical of well-developed individuals.